Oilmarket Blog

ARA independent product stocks lowest since August

Gepubliceerd Jacob on 5 november 2018 9:11:42

(Argus) – Oil product stocks held in independent storage within the Amsterdam-Rotterdam-Antwerp (ARA) trading hub fell by 2.6pc from a week earlier to a nine-week low of 5.3mn t, prompted by falling stocks of all recorded products.

Naphtha stocks fell by 16pc to 241,000t, the lowest level since 11 May 2018. Outflows to inland end-users were marginally higher than the level recorded a week earlier. Tankers arrived from Russia and the UK, and none were reported leaving the area. Northwest European naphtha prices are at their lowest since April, inhibiting arbitrage inflows from other regions.

Stocks of gasoil fell by 51,000t to 2.51mn t, the lowest level recorded since 30 August, amid firm demand. German 10ppm diesel barge differentials have found support across the last week, potentially aided by a brief recovery in Rhine water levels. Water levels rose to 53cm at key measuring point Kaub today, according to shipping reports, from just 27cm on 24 October — allowing a greater number of barges to access firm demand from German inland markets. Diesel barge differentials climbed to premiums of $5/t against Ice November gasoil at the close of October, from premiums of $3.75/t on 25 October. Tankers arrived in the ARA area from Saudi Arabia and the US, and departed for the United Kingdom.

Gasoline stocks fell by 11,000t to 985,000t. Volumes heading up the Rhine into Germany were higher than those coming the other way, with refinery activity in the country impeded by low water levels and outages. Tankers departed for the Mideast Gulf, Suez for orders and the UAE. Tankers arrived from Finland, France, Spain, Sweden and the UK.

Fuel oil stocks fell by 2.4pc to 944,000t, the lowest level since the first week of April amid firm demand from east of Suez. The fall in inventories was prompted by the loading and departure of at least two Suezmax-sized cargoes during the week to today. Tankers arrived in the ARA area from Latvia, Poland, Russia and the UK.

No jet kerosene cargoes arrived in the ARA area during the week to today, and inventories reached their lowest level since 17 May at 626,000t. Backwardation in underlying Ice gasoil futures made the economics of storing jet fuel in tank unviable.

Reporter: Thomas Warner

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ARA independent product stocks fall

Gepubliceerd Jacob on 26 oktober 2018 15:25:16

(Argus) Oil product stocks held in independent storage within the Amsterdam-Rotterdam-Antwerp (ARA) trading hub fell by 7.6pc from a week earlier, prompted by a drop in stocks of all products recorded except gasoline.

Stocks of gasoil fell by 11pc to 2.56mn t hitting their lowest level since early September. A lack of incoming cargoes from the US and the Mideast gulf because of higher demand in other key import regions meant that outflows outstripped incoming volumes. Tankers arrived in the ARA area from France, Spain and the UK and departed for Latin America, South Africa, the US and west Africa. Low water levels on the Rhine impacted gasoil flows into Germany further this week.

Most Rhine gasoil barges stayed north of Koblenz, but some passed the bottleneck at Kaub in response to strong demand from upper Rhine destinations. Margins for French 10ppm diesel cargoes on a cif Le Havre basis climbed to $17.59/bl against North Sea Dated yesterday, the widest since 15 August according to Argus data.

Fuel oil stocks fell by 6.8pc to their lowest level since the first week of April, prompted by firm demand from east of Suez. The fall in inventories was prompted by the loading and departure of at least three cargoes during the week to Thursday. The SCF Ural and Chios departed for Singapore during the reporting period carrying 140,000t cargoes, while the Advantage Spring departed with a 130,000t cargo. Tankers arrived in the ARA area from Estonia, the Mediterranean, Russia and the US.

Gasoline stocks were broadly unchanged. Outflows were again supported by exports of summer grade product to destinations in the southern hemisphere. Eurobob oxy gasoline is currently trading at a 43¢/bl discount to North Sea Dated crude for the first time in over seven years, with supply outstripping demand in key export markets. Tankers departed for Latin America, South Africa, the US and west Africa.

No jet fuel cargoes arrived in the ARA area during the week to 25 October, and inventories reached their lowest level since 17 May.

Naphtha stocks fell by 16pc, their lowest level since 6 September. Low Rhine water levels again weighed on demand from inland petrochemical end-users.

Tankers arrived from Finland, France, Norway and Poland. Europe remains under a naphtha supply overhang amid low demand from gasoline blenders and petrochemical end-users, prompting a sharp rise in eastbound bookings.

Reporter: Thomas Warner

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ARA oil product stocks fall on gasoil draws

Gepubliceerd Jacob on 19 oktober 2018 13:16:35

London, 18 October (Argus) — Oil product stocks held in independent storage within the Amsterdam-Rotterdam-Antwerp (ARA) trading hub fell by 4.1pc on the week today, as a result of a significant drop in gasoil volumes.

Stocks of gasoil rose fell by 5.3pc to their lowest in four weeks (see table). Cargoes arrived from Russia and departed for France, the UK and the Mediterranean. Demand from along the Rhine remained muted, particularly in the upper Rhine area.

Gasoline stocks fell by 7.1pc. Ample supply weighed blending margins, boosting outflows. Tankers left for Australia, Latin America, Singapore, the US and west Africa.

Fuel oil stocks rose slighlty. Tankers left the ARA area for Singapore and west Africa, and the Chios was still in ARA partially loaded today. Tankers arrived in the area from France, the Mediterranean, Latvia, Poland, Russia and Spain.

Naphtha stocks edged up, with demand from within Europe subdued amid narrow gasoline blending margins and transport issues on European waterways.

Reporter: Thomas Warner

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GREATER SINGAPORE TANK STORAGE MARKET OUTLOOK 2018 – PART 2

Gepubliceerd Jacob on 17 oktober 2018 11:23:53

Click here if you missed Part 1 of the article “Greater Singapore Tank Storage Market Outlook 2018”.

Singapore naturally has a vast deficit of fuel oil as local production is only modest while demand is of unparalleled size. Large imports of fuel oil allow Singapore to fulfill its hub function.

THE IMPACT OF IMO 2020 – A GAME CHANGER

Fuel oil demand primarily comes from marine bunker activity and is therefore submissive to a large change following the IMO 2020 regulations, which require lower sulphur contents to be used in marine fuel.

Fuel oil generally is high on sulphur and will thus see a sharp decline in demand from 2020 onwards when high-sulphur fuel oil is replaced by, among other alternatives, diesel oil. After 2020 demand will gradually pick up as a result of growing economies and populations, but its share in marine bunkering will remain low.

The immediate switch from fuel oil to alternatives will provoke a surplus of the product for most countries in the region, while Singapore will continue to have a deficit, be it smaller than before. The region in whole will have a surplus in the short run, lowering fuel oil trade flows from other continents to Asia.

TRADE IMBALANCES WILL CONTINUE INTENSIFYING TANK STORAGE USAGE

Diesel is Far East and the ISC’s largest refinery output category and together account for roughly 50% of the total. The main drivers for diesel demand are passenger cars with diesel engines, marine bunkers, building heating and industry. Passenger car fleet developments are of great importance to the demand for diesel. Since diesel does not propel the majority of cars in Far East and the ISC, the impact of car emissions regulations on diesel demand is limited. With growing populations and developing economies, the number of diesel-powered passenger cars is set to further increase in the future, despite more efficient engines, the increasing share of electric vehicles in the passenger car fleet and other environmental initiatives. IMO 2020 regulations, will increase the demand for diesel in the maritime sector. As of 2017 most of the region’s major producers and consumers of diesel have surplusses with the largest ones in China, India and South Korea. Australia, on the other hand, has quite a substantial deficit, meeting most of its diesel demand with imports.

China is the region’s largest producer of gasoline, followed by India and Japan. India and China have seen tremendous growth in their gasoline productions, both having doubled their output since 2009. The primary demand driver for gasoline is passenger cars, accounting for virtually the entire gasoline consumption. Passenger car fleet developments are therefore of even greater importance to gasoline than for diesel. Chinese demand for gasoline has more than doubled over the last decade despite strict emissions regulations but hasn’t outgrown production yet. Demand for gasoline is very sensitive to changes in car fuel usage, but the growing Chinese economy offsets the strict fuel policies of the country. India’s demand is still relatively low but growing rapidly, while Japanese demand naturally seems to be in decline. As for diesel, most of the major producers/consumers of gasoline had surplusses of the product in 2017.

Fuel oil has historically been Far East and the ISC’s third largest oil product in terms of demand. Simultaneously it’s Singapore’s largest product in terms of demand and trade volumes, since the country acts as the region’s largest marine bunker fuel hub. Local production is negligible, however, and Singapore fulfils demand through imports. The region has a deficit of the product despite increasing local production. Most fuel oil is produced by China and Japan, with China increasing its production while Japanese production is in decline. South Korean and Indian production is likewise in decline. Due to its hub function Singapore has the largest demand for fuel oil in the region, as a variety of ships from many different countries come to Singapore in search for the right propellant. China comes second in terms of demand, while Japanese fuel oil demand is only a third of what is was half a decade ago.

CONCLUSION

Relevant market fundamentals for the oil storage business are the shape of the forward curve, the competitive market structure and the logistical factors supply, demand, imbalances and trade flows. Tank terminals are part of the oil products supply chain and therefore logistical factors such as local product demand, regional refinery output, imbalances and trade flows are very relevant. Developments in these factors, as well as new regulations influence the demand and requirements for tank terminal capacity.

 

SINGAPORE TANK TERMINAL MARKET STUDY 2018

Based on extensive market research, PJK International – in partnership with Ener8 Limited – has produced a +75 pages report providing insights into the Tank Terminal Market in both Singapore and the greater Singapore area.

 

Click here to download the table of contents.

 

For more information on how to purchase this report please contact aldo.cavalcanti@pjk-international.com

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The impact of ARA barge transport on the feedstock within the petrochemical sector.

Gepubliceerd Jacob on 15 oktober 2018 14:35:30

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Naphtha is an intermediate hydrocarbon liquid stream derived from the refining of crude oil. It is in the ARA region mostly used as a gasoline blending component as feedstock within the petrochemical sector. Other important feedstocks for the petrochemical sector include ethane, propane and methane. The petrochemical sector is responsible for producing various materials such as plastic, paints, solvents, fibres and raw materials for pharmaceutical and cosmetics sectors.
The ARA-region, or Amsterdam – Rotterdam – Antwerp region is an area in The Netherlands and Belgium where various coastal and inland ports are interconnected and act as a global hub. Apart from the large ports Amsterdam, Rotterdam and Antwerp it includes Flushing, Ghent, Terneuzen and Moerdijk as other relevant ports. All these ports lie in the delta of various rivers, like the Rhine, Meuse and Scheldt, which flow into the North Sea and could be seen as gateway of the European continent. Hinterland markets are connected to global markets via these seaports, in particular the vast hinterland of German industrial centres and population. The river Rhine, Scheldt and Meuse enable barge transport to and from these ports to inland markets, which give the market its unique attractiveness and improves the position of the hub in the worldwide trade flows.

When we take a closer look at the feedstock prices we can observe that naphtha is the most expensive feedstock. In the image below you can see the historical monthly petrochemical feedstock prices from 2013 till 2018.

Although naphtha is the most expensive feedstock, it is the most used feedstock in the ARA region of all the substitutes mentioned above. There are various factors influencing this, but in this article we focus solely on the barge transport. As we have established earlier the Rhine has a unique position as being an important route for the transport of liquid bulk across different Western European countries. It is one of the world’s most frequented inland waterways. In Europe, there are more than 13.500 vessels offering inland freight transport services (dry cargo, tanker cargo and push & tug vessels) with a total loading capacity of 17 Mio tonnes. About 76% of the European fleet comes from Rhine countries. Source : Inland Navigation Europe. Tankers account for +- 15% of the total inland fleet.

 

Of the liquid bulk market, according to PJK’s interntional numbers you can see in the image below a comparison of the number of inland tankers showing that the clean (including chemical) tankers are far more dominant compared to gas tankers. While there are currently more gas tankers under construction, the same accounts for clean tankers. Clean tankers under construction are also bigger in terms of DWT, up to 10,000 DWT.

 

 

 

As mentioned before, naphtha is a liquid hydrocarbon mixture, which means it should be transported in double hull tanker, mainly to prevent cargo from leaking due to its hazardous nature. With regard to ethane and propane it is different as these are gases, and therefore have to be transported in special gas tankers, which are often fabricated with triple hulls and equipped with circular tanks. At the moment there are far more double hull tankers available in the market compared to the gas tankers, increasing supply of transport possibilities. Therefor the transport of naphtha is economically more feasible and accessible, despite the higher product costs.  Another reason for the high usage of naphtha in the region is the excess components received after cracking naphtha. These residues are used in the gasoline blending market, which holds a key position in the ARA and provide more usages of the excess valuable components like for example isomerate, raffinate, toluene and xylene.

As you can see a lot of factors influence the petrochemical market. Are you struggling to connect the dots of the petrochemical side of the cluster? We can then provide you with our ARA Petrochemical Tank Storage report, where we aim to shed some light on complex subjects by unravelling trends and themes that underlie current markets relevant for the ARA cluster and by giving an outlook for future states of these petrochemical markets.

 

Contact us at our headquarters in the Netherlands at +31 (0) 850 66 25 22

The contents of this article from PJK International has been written with the greatest possible care. However, PJK International cannot guarantee the accuracy or completeness of the information. The content of PJK International blog publications therefore are not legally binding. PJK International accepts no liability which might arise from the content of its blog.

 

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ARA independent product stocks fall

Gepubliceerd Jacob on 12 oktober 2018 15:14:01

London, 11 October (Argus) — Oil product stocks held in independent storage within the Amsterdam-Rotterdam-Antwerp (ARA) trading hub fell by 2.4pc from a week earlier, largely as a result of a significant drop in fuel oil volumes. Stock levels of other products were broadly stable.

Fuel oil stocks fell by 17.3pc to 1.03mn t, prompted by the loading and departure of several cargoes during the week to today. The Max Jacob, booked by Litasco to ship 130,000t of HSFO to Singapore loaded on 4 October and headed eastbound. The South Sea, booked by P66 to ship 130,000t of cracked fuel oil from Rotterdam to Singapore, likely started loading on 11 October. Tankers also left the ARA area for west Africa and the Mideast Gulf. Arbitrage economics to take high-sulphur material from northwest Europe to Asia Pacific strengthened in the past week. The Singapore second-month 380cst swap premium to HSFO cargo prices in northwest Europe averaged $33/t on 4-10 October, compared with an average spread of $29.70/t during the prior five trading days. A total of 430,000t of fuel oil was booked to Singapore this week.

Gasoline stocks fell by 25,000t to 1.06mn t, with outflows being supported by efforts to sell off stored summer-grade volumes. Cargoes arrived in the ARA area from Finland, Spain and the UK. Tankers left the area for the Mideast Gulf, Brazil, Latin America and the Mediterranean. Naphtha stocks fell by 11,000t to 341,000t, prompted by steady demand from inland petrochemical end-users and low volumes arriving in the area. Tankers arrived from Algeria, France and Portugal, and none were seen departing.

Stocks of gasoil rose by 102,000t to 3.04mn t, the highest level since mid-February 2018. Tankers arrived in the ARA area from Russia and Saudi Arabia, and departed for France, the Mediterranean and the UK. Low water levels on the river Rhine continued to impact barge traffic into Germany and France, bolstering interest in other forms of product transport. Cargo freight rates from the ARA continued to rise as a result, with some operators preferring to move material inland via other coastal outlets.

A single jet kerosene cargo arrived in the ARA area during the week to 11 October and a single tanker left for the UK. Inventories were effectively unchanged on the week at 674,000t. The Raysut partially offloaded in Rotterdam following a partial deposit into Fawley. The vessel had been sitting in the English Channel since 18 June, as the buyer was exercising some of its contract options by waiting to offload. Northwest European jet fuel demand has fallen since last week. Imports from east of Suez have been thin, with most arrivals entering UK and French ports.

Reporter: Thomas Warner

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GREATER SINGAPORE TANK STORAGE MARKET OUTLOOK 2018 – PART 1

Gepubliceerd Jacob on 11 oktober 2018 16:00:23

As one of the most crucial tank storage hubs in the world, Singapore and nowadays the greater Singapore region play a fundamental role in global trade.

Far East and the ISC countries have experienced tremendous economic growth over the past decades, and this upward trend even has had an impulse after the global financial crisis in 2008.  Going forward, trade imbalances, regulations and newly build capacity will continue to influence opportunities in the tank terminal industry in the greater Singapore region.

REGIONAL DEMAND FOR OIL PRODUCTS REMAINS STRONG

The continuously growing economies have driven supply and demand for oil products in Asia, with the Indian and especially Chinese economy increasing their production substantially. China, India, Japan and South Korea are the region’s largest suppliers of oil products, with China more than doubling any other country’s output in 2017.

Far East and the ISC refinery output primarily consists of diesel and gasoline, accounting for 44% and 26% of the region’s total output in 2017 respectively. The productions of both products grew rapid over the past decade, more than any other main refinery output, while demand for both products in the region has increased gradually over the last decade.

Far East and the ISC has surplussus of diesel, gasoline and jet-kerosene, meaning it produces more than it consumes of these products. A higher surpluss generally leads to higher exports of a product, implying an increased demand for temporary tank storage capacity. Deficits exist for fuel oil, naphtha and LPG, meaning Far East and the ISC has to import these products from outside of the region.  Singapore’s tank terminal industry has been benefiting from this situation for a long time.

SINGAPORE ON ALERT AS NEIGHBORS’ TANK STORAGE MARKET SHARE INCREASES

Malaysia and Indonesia aim at increasing their market share both approaching Singapore’ total tank storage capacity, while Singapore stays on alert with only minor expansions.

Singapore has been the largest provider of tank capacity in the Greater Singapore area and has roughly tripled its capacity since 2005, especially during the prolonged period of contango between 2005 and 2011, which supported demand for tank capacity. Market circumstances were less favorable after 2011, but the construction of new capacity had already begun adding new storage tanks after this date.

Malaysia is expected to almost double its capacity in 2018 with 4,900,000m3, while in Singapore a total of 370,000 m3 or a mere 2% of its total capacity is being constructed as of 2018. Indonesia has no capacity that is noteworthy under construction but has plans to add more than 7 million m3 in the future. This expansion would more than double the country’s total capacity, but whether these plans will be executed is uncertain.

Singapore will therefore primarily see increased competition from Malaysian tank storage operators.

PREPARING FOR A NEW SET OF CHALLENGES

The Tank Terminal industry in the Greater Singapore area is facing some new challenges, such as new restrictions on emissions, IMO 2020’s new bunker fuel specifications and logistical developments in Asia.

Environmental regulations will  have a downforce to gasoline and diesel demand in the region, changing national imbalances and thus trade flows.  A sharp decline in fuel oil demand as of 2020 on the other hand, will increase marine gasoil demand, which will result in less temporary storage of fuel oil in Singapore and increase the demand for temporary storage of marine gasoil.

There may also be pressure on demand for marine bunkering and temporary oil products storage in Singapore when alternative cargo routes replace the Strait of Malacca. These could include new One Belt One Road trade routes and China’s two Ocean’s strategy via pipelines through Myanmar.

 

Click here to read Part 2 of the article “Greater Singapore Tank Storage Market Outlook 2018”.

 

SINGAPORE TANK TERMINAL MARKET STUDY 2018

Based on extensive market research, PJK International – in partnership with Ener8 Limited – has produced a +75 pages report providing insights into the Tank Terminal Market in both Singapore and the greater Singapore area.

 

Click here to download the table of contents

 

For more information on how to purchase this report please contact aldo.cavalcanti@pjk-international.com

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Insights from Lars – comparing ARA and Rhine freight rates over the summer.

Gepubliceerd Jacob on 1 oktober 2018 15:04:03

 

 

 

Freight rates in both the ARA region as well as on the Rhine remained strong, supported by increasing demand and the ongoing low water levels, which are hampering intakes. Freight rates for Rhine based destinations have not only risen for Middle and Upper Rhine destinations, where loaded volumes are contracted by low water levels up pegel Kaub, but also destinations in the German Ruhr area are highely affected. The difference between ARA-routes like Cross Harbor transports, Antwerp – Amsterdam and Rhine based tranports to Duisburg or Cologne are shown below.

In common situations, freight rates per mton are increasing in line with the voyage durations. The strong demand, and therefore increasing rates, to German markets are seen in the two graphs. Besides the absolute freight rates, a graph is made for indexed freight rates. The base rates of 1st of May 2018 are used for this calculation. After a slow late-spring, with low freight rates per ton, rates started to increase from July on. This has been accelerated by decreasing water levels and increasing demand for automotive fuels in hinterland markets. Rates to the Ruhr area, which are longer voyages compared to ARA-transports and are therefore priced at higher levels, saw a steady increase during the summer season. In August, a distinction is seen between demand in ARA, which was fading, and up the Rhine, which was supported by diesel transports.

 

 

Last month, rates up the Rhine increased further. Water levels continued to stay low and the market regained support from outages at various refineries in Germany. The maintenance season is causing less local supply and an unplanned outage at the Vohburg refinery in Bavaria is limiting product supply even further. Importers are looking at alternative outlets and more product needs to be imported to handle domestic demand. This is partly done over the Rhine, where barges are still coping with loading restrictions. Imports by barge have however increased by over 60% during September compared to the summer months, as was seen in PJK’s Rhine barge flow reports. By comparison, rates to Lower Rhine destinations have more than quadrupled in the last months. The revenue per barge is somewhat lower due to less loaded volumes, but are still elevated. This is also seen in the ARA, where supply of barges is lacking due to the higher demand in Germany.

 

The demand for importing product in the coming weeks could remain high since end consumers still need to stock up heating oils for the winter. This has been postponed last spring due to the backwardated market structure, so stock levels in hinterland are relatively low. With inadequate local production, low availability of barges and high freight rates, keeping track of the markets is vital in order to stay up to date.

 

 

If you would like more information about our products like the Rhine flow service, barge freight rates and daily report contact our sales department in the Netherlands at 00 31 850 66 25 00.

 

 

 

 

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Oil derivatives market and tank storage markets

Gepubliceerd Jacob on 1 oktober 2018 14:04:30

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Tank terminals play a vital role in daily oil trading by enabling break and making bulk operations and balancing short term variations in supply and demand. Oil trading companies have an interest in renting tank storage capacity as the oil derivatives market is related to physical oil markets. For ARA oil products ICE gasoil futures are one of the most important trading tools to manage risk. In the image below you can see the ICE LS Go Futures graph.

 

The backwardation at the beginning of the gasoil curve decreased to to +$0.00 despite far higher spot prices, while the contango in the middle decreased substantially. Trading opportunities have therefore become harder to find.

 

 

As gasoil inventories in the region are higher pressure is put on local gasoil prices, while higher crude prices make refinery input more expensive. As a result, Brent crude crack spreads are weak and this could lead to lower output of local refiners. Currently the tank storage market is in backwardation, traders have no incentive to store gasoil and will minimize inventory levels. That is why the demand for storage capacity will decrease when the market is in backwardation.

 

Would you like to have a weekly update about the tank storage market ? Or get a better insight about the ARA region ? Contact me for more information and become familiar with our diverse services.

 

 

 

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ARA independent product stocks increase

Gepubliceerd Jacob on 28 september 2018 13:56:15

London, 27 September (Argus) — Oil product stocks held in independent storage within the Amsterdam-Rotterdam-Antwerp (ARA) trading hub rose by 6.3pc from a week earlier because of large gains in fuel oil and gasoline inventories.

Fuel oil stocks rose by a fifth from a week earlier as product was put into storage to be loaded on two Singapore-bound VLCCs. One of these tankers — the Ridgebury Artois — has likely started loading fuel oil and could shortly leave for Singapore. No VLCCs left during the past week, while the Suezmax Sabine departed for Asia-Pacific with 130,000t of fuel oil. Bookings on the route to Singapore have picked up pace this week as export economics improved following a decline in Singapore’s inventories to multi-week lows. The ARA region imported fuel oil from the Black Sea, the Baltic Sea and Spain.

Gasoline stocks also rose, climbing by 10pc amid limited export options. US demand for gasoline has been weak since the conclusion of the summer driving season. This was reflected in last week’s increase in stocks, which came despite lower domestic production. During the week to 21 September, implied demand dropped to a 17 week low, and was also down year on year, according to EIA data. Exports to the Middle East are also likely to slow in the coming week as regional refineries come back from unplanned shutdowns. The ARA region exported gasoline to the Mideast Gulf and west Africa during the past week.

Lack of export options and comparatively low demand also led to an increase in naphtha stocks, which climbed 6pc from a week earlier. The European naphtha market is well-supplied, while demand from gasoline blenders is low. And arbitrage economics to Asia-Pacific are unworkable, largely because of ethylene cracker maintenance in that region. No naphtha was exported from the ARA region this week, while product arrived from Algeria, France, Spain and the UK.

And diesel inventories rose by less than 1pc this week. US diesel production also has fallen, which is likely to lead to a decline in exports to Europe in the coming weeks. In Europe, water levels on the Rhine remain low, keeping barge rates high and limiting inland shipments. The economics for importing diesel into Europe remain weak. But this could change if Rhine river water levels rise, allowing German demand to access ARA gasoil stocks, reducing supplies and pushing prices higher.

Jet fuel stocks bucked the trend, dropping by 14,000t, or 2pc because of comparatively high export volumes. The ARA region shipped the product to Denmark and the UK, while importing some jet fuel from the Mediterranean.

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